Huawei exec: We're 'not interested' in the U.S.

Eric Xu, one of three rotating CEOs at the Chinese telecom gear maker, made the comments at an analyst conference in response to a question about congressional inquiries into Huawei spying concerns.

Workers take a lunch break at Huawei's Shenzhen, China, campus. Jay Greene/CNET

A Huawei senior executive said Tuesday that the giant Chinese telecom gear maker is "not interested" in the U.S. market any longer.

According to reports by Reuters and the Financial Times, Eric Xu, Huawei executive vice president and one of its three rotating chief executives, expressed exasperation at inquiries by U.S. lawmakers into concerns that the company's gear could be used to snoop on American companies or individuals. Last fall, the House Intelligence committee issued an extensive report discouraging American companies from buying Huawei gear over espionage fears.

At an analyst conference Tuesday in Shenzhen, China, where Huawei is headquartered, Xu said that the company was focused on other markets these days.

"We are not interested in the U.S. market anymore," Xu said, according to the Reuters report. "Generally speaking, it's not a market that we pay much attention to."

Even though Huawei counts such global giants as Vodafone, Bell Canada, and Telekom Malaysia as customers, concerns raised in Congress have created a significant hurdle for the company in the United States. Huawei has only be able to sell its networking gear to smaller U.S. telecom companies, such as Leap and Clearwire.

Bill Plummer, Huawei's vice president of external affairs attended the Shenzhen analyst conference and told CNET that Xu's comment "reflects the realities of our carrier network business in the U.S." Because the major telecoms in the United States have decided not to do business with Huawei, the growth in the company network carrier business is coming elsewhere.

"Considering the situation we currently face in the U.S., it would be very difficult for the U.S. market to become a primary revenue source or a key growth area for our carrier network business," Plummer said. "Nevertheless, our U.S. employees remain committed to providing quality services for our customers."

And while Huawei has struggled to sell its networking gear in the United States, it has been ramping up efforts to launch new mobile phones in the market. Earlier this month, for example, it announcing plans to release a marquee smartphone in the United States this summer. The company has even signed on as a sponsor of the Jonas Brothers tour that begins in Chicago on July 10.

Reuters noted that Xu did not respond to a follow-up question about the company's plans regarding its mobile handsets in the United States.

While Huawei certainly has significant business outside the United States, it has spent heavily to build operations in Texas and California. The company has more than 1,000 employees at its U.S. headquarters in Plano, Texas, and several hundred more at a research and development facility in Santa Clara, Calif. It also has poured money into public relations and lobbying operations in Washington, D.C.

The concerns Congress has with Huawei largely stem from its secretive founder and chairman, Ren Zhengfei. As China began to encourage business development, Ren emerged as one of the country's top entrepreneurs. But his history as a civil engineer for the People's Liberation Army continues to raise red flags for hawks in the federal government.

In its report, the House committee noted that Huawei failed to address concerns over its ability to snoop on critical corporate and personal data through digital backdoors that the company has the ability to install. And it failed to assuage concerns raised by lawmakers that might be persuaded by the Chinese government to aid its espionage efforts if asked to do so.

About the author

Jay Greene, a CNET senior writer, works from Seattle and focuses on investigations and analysis. He's a former Seattle bureau chief for BusinessWeek and author of the book "Design Is How It Works: How the Smartest Companies Turn Products into Icons" (Penguin/Portfolio).

 

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